Docs Need Inflation-Adjusted Medicare Pay Increase in 2025, MedPAC Members Say

Physicians should receive an increase in their Medicare reimbursement in 2025 that’s equal to half the increase in the Medicare Economic Index (MEI), a measure of healthcare inflation, according to a draft recommendation from the Medicare Payment Advisory Commission (MedPAC).

The draft recommendation, which, once finalized, will be included in the commission’s March report to Congress, states that physicians should be given an increase from 2024 rates at “the amount specified in current law” plus 50% of the MEI; however, current law specifies a 0% increase, so that would mean physicians would only get the increase based on the MEI. The draft recommendation also urges Congress to add on extra “safety-net” payments for physicians who care for low-income beneficiaries.

Commissioners voted unanimously last Thursday — 17-0 — to endorse the recommendation, but Commissioner Jonathan Jaffery, MD, MS, chief healthcare officer at the Association of American Medical Colleges in Washington, D.C., expressed concerns about some of the conclusions highlighted by the staff in its slide presentation at the meeting. “One of the slides said that beneficiaries have good access to care … I’m confident that most, if not everybody, here can share personal anecdotes of struggles with access and getting appointments for all sorts of things,” he said. “I think that feels like a conclusion that isn’t based on the data.”

Commissioner Brian Miller, MD, MPH, of Johns Hopkins University in Baltimore and a nonresident fellow at the American Enterprise Institute, agreed, noting that although many physicians are required to accept Medicare in order to maintain hospital privileges, a 2022 research letter in JAMA Network Open found that among psychiatrists — who mostly don’t need to be concerned about privileges — Medicare acceptance dropped from 60.7% to 55.1% during the years 2013 to 2019. “While this measure is not perfect, this may be more indicative of the deeper access problems that are present in the Medicare program,” he said.

Commission member Gina Upchurch, RPh, MPH, founder and executive director of Senior PharmAssist in Durham, North Carolina, said she was particularly supportive of the suggestion of paying the safety-net providers a little extra. She mentioned that for dual eligibles — patients who are on both Medicare and Medicaid — some states base their reimbursement on either 80% of the Medicare-allowable amount or the Medicaid-allowable amount, whichever is less. “We don’t want a disincentive for providers to see people who are dually eligible for Medicare and Medicaid,” she said.

Commissioner Lawrence Casalino, MD, PhD, of Weill Cornell Medicine in New York City, also praised the add-on payment. “If the recommendation were only for half the MEI as an update without the recommendation for the safety-net payment, I would have to vote no,” he said. “MEI alone wouldn’t be enough.”

He emphasized that the “safety-net” payment doesn’t go to just a small group of doctors who only treat low-income patients. “It’s not like there are safety-net clinicians and non-safety-net clinicians and only safety-net clinicians are going to get the payment,” Casalino said. Instead, “everyone will get it for every low-income patient they see.”

Commission Chairman Michael Chernew, PhD, of Harvard Medical School in Boston, said that the recommendation only applied to the very narrow issue of fee schedule payments for 2025, but added that MedPAC would soon be considering broader issues related to the Physician Fee Schedule, such as the lack of an inflation update. “It has not escaped us that a Physician Fee Schedule with no inflation update leads to a progressively slow deterioration in inflation-adjusted fees,” he said. “It could have ramifications moving forward, even if we have not seen them yet.”

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